Craig Ingram's "Comment Column" from the "East Gippsland News".

CRAIG COMMENTS

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“Privatisation”, “deregulation”, “competition”, “free trade agreements” and “full cost recovery” are the economic buzz words at present, with rural industries facing a never-ending raft of reforms and regulation in pursuit of these philosophical beliefs. At the same time, our traditional rural advantages are being whittled away. In principle, it is hard to argue that all industries should not pay their way in a competitive environment without government subsidies. The only problem with this principle is that our competitors - both within Australia and internationally - are not playing by the same rules and in most cases they are not even playing the same game.

For example, the recent decision by VicForests to raise royalties of sawlogs by 22.4% has been justified by the government because they claim it places Victorian timber royalties in line with other mainland states and the plantation industry. But the real competitors to Australia 's native hardwood industry are the timber producers in Indonesia and PNG where companies pay almost no royalties; adhere to no environmental performance; pay miniscule wages; and compete against Australian producers on both the domestic and export market. The anti-timber forces in Australia are so committed to ending the native forest timber industry that they deliberately compromise our export standing to achieve their own extreme aims, yet turn a blind eye to the performance of our neighbours and competitors.

Australian producers are being promised major benefits from the free trade agreements (FTA) with the United States and China , yet the USA FTA does not guarantee US market access for our most efficient agricultural producers for decades. It also restricts how and when that access will be allowed, yet gives almost unlimited access to the Australian domestic market from day one to subsidised industry's in the US . That is hardly “free trade”.

The current negotiations on a FTA with China pose some interesting challenges. What will the impact be on an already stressed dairy industry? Over the past decade, Australian dairy farmers have benefited handsomely from the sale of dairy heifers to China , due to the push to create a dairy industry in that country. But will the decision to sell our best dairy genetics come back to bite our own dairy producers? Annual rural wages in China are about equal to the weekly average wage in Australia . Environmental and regulatory restrictions are almost non-existent and the cost of milk production in China is a fraction of what it costs in Australia . The only limiting factor for China to undercut our domestic and international markets is the cost of transport, and China is closer to the majority of Australia 's markets.

One of the clearest examples of unfair competition and predatory behaviour in Australia - apart from supermarkets and petrol pricing - is Telstra's dominance of the telecommunication interconnection. Over the past two decades, rural telephone users have paid inflated STD rates to build Telstra's optical fibre network - the backbone of our nation's future broadband connections. The only problem is that Telstra and the government are hell bent on privatisation and gaining the greatest price for the network. Telstra is refusing to give competitive priced access to this fibre interconnection, and the Federal Government is refusing to concede the necessity of operational separation of network, which would at least ensure the potential for some line access at competitive prices. So, again, rural users will be at the mercy of Telstra to provide fair competition to the new kids on the block its competition they will have to wrestle the 800 kg gorilla (Telstra) which dominates the market, owns all the lines (that we have paid for) and has the majority of the existing market retail and wholesale share. Yet we are constantly told that competition will solve all the problems of the world.